LONDON (MarketWatch)'European stock markets ended lower in a choppy session as losses for banks weighed on sentiment Tuesday and Spanish and Italian bond yields surged on debt concerns.
The Stoxx Europe 600 index XX:SXXP 'closed down 1.1% at 264.29, after trading as high as 267.62 earlier in the day.
In Spain, the IBEX 35 index XX:IBEX 'tumbled 2.7% to 7,824.50, while yields on 10-year Spanish government bonds ES:10YR_ESP 'rose 9 basis points to 5.41%.
'One cannot say with any conviction that the euro zone is robust or recovering,' said Stephen Pope, managing partner at Spotlight ideas. He further added that bad news from Spain 'traveled to the next in line which from the markets perspective is Italy.'
Unemployment in the Spain rose 0.8% in March to 4.75 million, government figures showed. Separately, Spanish Finance Minister Luis de Guindos told The Wall Street Journal in an interview that there was 'no margin for error' with the government's 2012 budget announced last week. He said Spain's debt-to-gross-domestic-product ratio will likely rise to just over 78% this year from 68.5% in 2011.
Shares of Bankinter SA ES:BKT 'fell 5.9%, Banco Santander SA ES:SAN 'gave up 4%, while BBVA SA ES:BBVA '< span class="quotePeekContainer">BBVA 'shed 4.5%.
Yields were also rising for Italy's 10-year government bonds IT:10YR_ITA ,'adding 10 basis points to 5.14%. Bond prices move inversely to their yields.
In Milan, the FTSE MIB index XX:FTSEMIB 'traded 2% lower at 15,624.23, weighed down by Banca Popolare di Milano SCARL IT:PMI ,'off 6.6%, and Banco Popolare SC IT:BP , down 6.8%.
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Gloomy data hit at austerity plans
Dire figures on unemployment and manufacturing activity in the euro-zone's weakest members on Monday highlighted the scale of the currency bloc's economic problems. (Photo: AFP/Getty.)
In the U.S., stocks were mostly lower on Wall Street, pivoting away from gains in the first session of the second quarter. Factory orders for the U.S. rose 1.3% in February, slightly below analysts' estimates, while orders for January were revised down to a 1.1% decline from a prior estimate of a 1.0% drop.
Banks were also lower in France. BNP Paribas SA FR:BNP 'gave up 2.8%, Soci't' G'n'rale SA FR:GLE 'lost 3.7%, while Credit Agricol! e SA FR:ACA 'fell 3.2%. The CAC 40 index FR:PX1 'closed 1.6% lower at 3,406.78.
And in the U.K., shares of Royal Bank of Scotland Group PLC UK:RBS 'RBS 'declined 3.1% and Barclays PLC UK:BARC 'BCS 'lost 2.6%.
The FTSE 100 index UK:UKX 'was 0.6% off at 5,838.34, further pressured by Compass Group PLC UK:CPG , off 1.8%, after Morgan Stanley downgraded the food-service firm to equalweight from overweight. FTSE 100 gives up gains
Bucking the trend, Cairn Energy PLC UK:CNE added 4% outside London's main index. The oil and gas producer bought Agora Oil & Gas, a private Norwegian company, for $450 million in shares and cash.
In Germany, the DAX 30 index DX:DAX gave up 1.1% to 6,982.28, as Commerzbank AG DE:CBK 'shed 3.4% and Deutsche Bank AG DE:DBK ! 'lost 3%.
K+S AG DE:SDF also'weighed on the index, down 1.4% after Nomura Securities downgraded the potash producer to reduce from neutral.
Nomura also downgraded Dutch specialty-chemicals firm Akzo Nobel NV NL:AKZA , down 2.7%, to neutral from buy.
Among notable gainers, Novo Nordisk AS DK:NOVOB , up 2.4%, provided the biggest support in Europe as Bank of America Merrill Lynch added the stock to its Europe 1 list. The Danish firm was also among the biggest gainers on Monday after saying it owns 4.71% of its total share capital, as part of a buyback plan. The Danish OMX Copenhagen 20 index rose 1.3% to 465.15.
Swiss biotech firm Lonza Group AG CH:LONN 'added 1.6%. The company said Richard Ridinger has been appointed as new chief executive effective May 1.
In Brussels, drug maker UCB SA BE:UCB 'added 1.5% after the U.S. Food and Drug Administration approved its Neupro drug for Parkinson's disease treatment.